Ministry of Finance
Project Signing: World Bank Project Agreement Signed to Reduce Flooding and Improve Irrigation in West Bengal
The Government of India, the Government of West Bengal and the World Bank here today signed a loan agreement for a $145 million project to improve irrigation services and flood management in the Damodar Valley Command Area  in West Bengal.
The West Bengal Major Irrigation and Flood Management Project will benefit about 2.7 million farmers from five districts of West Bengal across 393,964 ha area with better irrigation services and improved protection against annual flooding to mitigate the impact of climate change.
The agreement was signed by Shri Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India; Shri Krishna Gupta, Principal Resident Commissioner, on behalf of the Government of West Bengal and Mr Junaid Ahmad, Country Director, India on behalf of the World Bank.
On the occasion, Shri Khare said that India is adopting a strategic growth path that uses and manages its water resources more efficiently. This project will assist in improving irrigation and agriculture in the Damodar Valley Command Area, by optimizing the use of surface and groundwater and strengthening flood management, which will help boost agricultural productivity and increase incomes in rural areas.
The DVCA is over 60 years old, and in need of modernization. Key challenges include degradation of infrastructure and inadequate irrigation management, including poor quality of service delivery, inefficient irrigation and the failure to serve the middle and tail parts of the canal network with surface water. Tail end farmers are compelled to extract groundwater, which increases the costs of cultivation and undermines the sustainability of the scheme. Between 2005 and 2017, the number of semi-critical blocks increased from five to 19 .
The Lower Damodar basin area is historically flood-prone. On average, 33,500 hectares of the cropped area and 461,000 people are affected annually. This downstream part of the project area lacks the infrastructure to protect against recurrent flooding. The project will invest in measures to reduce flooding, including strengthening of embankments and desilting.
Mr Junaid Ahmad said West Bengal has invested significant resources in developing its irrigation infrastructure. However, many of these assets perform below potential. The project will support the state’s efforts in creating modern and resilient irrigation infrastructure so that more farmers can diversify and shift to higher value crops in the coming years.
To deal with these challenges, several institutional reforms are planned under the project. These include introduction of a modern Management Information System , benchmarking and evidence-based decision making, promotion of conjunctive use of surface and groundwater, introduction of rational asset management and improving transparency through citizen engagement. Irrigation Service Providers will be recruited on a performance basis to improve the quality of irrigation services.
Mr IJsbrand H. de Jong, Lead Water Resource Management Specialist, and World Bank’s Task Team Leader for the project said that surface water in the Damodar Valley Command Area in West Bengal is progressively being confined to the top end of the system, groundwater use in the tail end continues to increase, groundwater levels continue to decline, and the sustainability of the scheme continues to erode, undermining the farmers’ capacity to adapt to climate change. The project will improve efficient use of surface water and enhance the long-term sustainability of groundwater use, making agriculture more productive and climate-resilient for farmers.
The total value of the project is $413.8 million, co-financed between IBRD , the Asian Infrastructure Investment Bank  and the Government of West Bengal .
The $145 million loan from the International Bank for Reconstruction and Development , has a 6-year grace period, and a maturity of 23.5 years.